My Lords, they say that a change is as good as a rest, so the Minister should be very sprightly now, as these amendments bring a slight change of gear. The group consists of eight items, mostly on the same theme, with the exception of the clause stand part in the name of the noble Baroness, Lady Bennett. Because that is so different, in the interests of time and clarity I shall not speak to it, so I look forward to hearing more about it from her.
I am tempted to say, “Here we go again”. The pattern we see here is one that we see with every Bill. First, the Government table new legislation absolutely riddled with secondary legislation. There is usually at least one case of secondary legislation allowing the amendment of primary legislation. Then the Delegated Powers and Regulatory Reform Committee steps forward and issues a report highlighting those issues and recommending remedies. Next, the Minister—in my area it is always the noble Lord, Lord Callanan—stands up, pleads the case for flexibility and sometimes, indeed increasingly, disputes Parliament’s competence to even make some of the decisions that will be required in the future. If we are successful through this process, some, although usually not all, the offending clauses get removed or modified. Lately, however, I detect an emboldened Minister. Increasingly—the ARIA Bill is an example—he uses the Dispatch Box to refute the arguments of the DPRRC.
We should be clear that this committee is an important senior committee of your Lordships’ House, and its report Democracy Denied? The Urgent Need to Rebalance Power between Parliament and the Executive stated that
“the principles of parliamentary democracy, namely parliamentary sovereignty, the rule of law and the accountability of the executive to Parliament”
should be at the heart of how a department approaches the delegation of legislative powers. The Bill falls far short of that objective, which is why there are so many
amendments in my name in this group. I am also pleased to support the noble Lord, Lord McNicol, and the noble and learned Lords, Lord Judge and Lord Thomas, in Amendment 50, which seeks to deal with Clause 47, which is clearly the most egregious example of executive overreach.
I turn to the amendments in order. Amendment 15 would require a streamlined subsidy scheme to be made by regulation. Clause 10 allows Ministers to make streamlined subsidy schemes, which are defined opaquely in Clause 10(4). This demonstrates that Ministers consider that all subsidies within such a scheme comply with the Bill’s subsidy control principles and requirements. In practice, it means that if a public authority keeps within the limits of the scheme it is no longer required to consider the subsidy control principles or requirements when giving an individual subsidy. Streamlined schemes will be laid before Parliament after being made. They will not be subject to the negative or the affirmative procedure for regulations. The DPRRC report sets out a very good rationale for recommending that the power to establish streamlined subsidy schemes in Clause 10 should be exercised by regulation and that then the negative procedure would be appropriate, hence Amendment 15.
Next is a probing amendment to raise concerns about the definitions in Clause 11 being made by regulations, as also highlighted by the DPRRC. Clause 11 allows certain definitions to be defined by affirmative regulations rather than appearing in the Bill. These definitions are
“subsidy, or subsidy scheme, of interest”
and
“subsidy, or subsidy scheme, of particular interest”.
We have touched on this already. These definitions are important in determining the scope of the subsidies or the schemes that must be referred to the CMA under Clauses 52 to 64. The DPRRC is sceptical about the Government’s reasoning for leaving these definitions out of the Bill, and so am I. The DPRRC states:
“The power in clause 11(1) to define in regulations certain key terms is inappropriate and we recommend that it be removed from the face of the Bill.”
As a coda, and this is quite unusual, the DPRCC adds:
“Although we have been critical of the over-use of Henry VIII powers, we prefer to see key definitions appear on the face of the Bill—perhaps with a Henry VIII power to amend by affirmative regulations—rather than not appearing on the face of the Bill at all and always being a matter for regulations.”
That is an interesting twist, and one that is worth debating.
Amendment 26 addresses Clause 16(4) to (7) and seeks to require designations related to marketable risk countries to be made by regulations not by direction. Again, this is recommended by the committee.
Clause 16(4) is subject to neither the affirmative nor the negative procedure. The Government’s reason for having no parliamentary procedure is that they
“want to be able to act rapidly to allow short-term export credit finance where market factors may have rendered the list of marketable risk countries in need of amendment.”
One thing that the Covid crisis has demonstrated is that there is no barrier to the rapid tabling and approval of regulation. One thing that Brexit has demonstrated
is that your Lordships’ House has a huge capacity to handle literally thousands of regulations when they are set before it. So any pleading that executive power is needed because Parliament cannot move fast enough is tosh, frankly—or, as the DPRRC puts it rather more politely,
“the Government can make rapid legislative changes by negative regulations or ‘made affirmative’ regulations. The idea that the making of regulations is inconsistent with the need to move quickly is fallacious. Negative and ‘made affirmative’ regulations can be made as quickly as can a direction.”
In other words, it is tosh. This amendment would install a process of regulation rather than ministerial direction.
Amendment 30
“would remove the ability of the Treasury to amend the definition of ‘deposit taker’”.
Amendment 31
“would remove the ability of the Treasury to amend the definition of ‘insurance company’”.
Amendment 32
“would remove the ability of the Treasury to amend the definition of ‘insurer’”.
Clauses 25 to 27 give the Government the ability to revise certain definitions to cater for developments that cannot be anticipated at the time of the Bill’s enactment. By way of example, the definition of “deposit taker” in Clause 25 uses a standard definition found across the statute book. If this definition required amendment in some future primary legislation, it would be perfectly possible for that legislation to contain the necessary consequential provision to enable the definition in Clause 25 of this Subsidy Control Bill to be amended in due course. The same reasoning applies to the definitions of “insurance company” in Clause 26(4) and “insurer” in Clause 23(7). Amendments 30 to 32 would remove the ability to amend those definitions, which, clearly, would not hamper future changes.
Amendment 50, proposed by the noble Lord, Lord McNicol, and signed by myself and the noble and learned Lords I mentioned, would remove Clause 47, which aims to give the Treasury powers
“to keep financial stability directions secret from Parliament and the public, thereby enacting a recommendation of the Delegated Powers and Regulatory Reform Committee.”
As the committee states,
“clause 47 involves fundamental issues of government accountability and parliamentary scrutiny … Not only does the provision enable the Government to disapply a legislative provision—the Bill’s subsidy control requirements—by a direction that can be kept secret from Parliament, but the justification for the power not being subject to any parliamentary scrutiny procedure includes, according to the Memorandum, ‘the potential for non-approval by Parliament’”.
In other words, this has to be included because Parliament might not agree with it. That should give us pause for thought.
The DPRRC is clear on the malign nature of this clause. It says that
“clause 47 is extraordinary for several reasons … Parliament has no power to scrutinise and reject a Government direction suspending the application of the Bill’s subsidy control requirements … Parliament may be deliberately kept in the dark about the existence of such a direction if the Treasury elects to rely on clause 47(7) … One of the Government’s reasons for having no parliamentary procedure is that the potential for non-approval by Parliament would create uncertainty that the subsidy will continue to be
available. In other words, because the Government might be defeated if the direction could be voted upon, there should be no parliamentary procedure and no vote.”
In conclusion, the committee recommends
“that clause 47(7) should be removed from the face of the Bill”,
which is what Amendment 50 would do.
I am sure the noble and learned Lords who follow me, and indeed the noble Lord, Lord McNicol, will be more erudite, but I leave this set of amendments with a final injunction that we should seek to uphold all the DPRRC’s recommendations, not just the most serious ones. Parliamentary power is being eroded, little by little, one piece at a time. We have to resist this. I beg to move.
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